A u/imakefartnoises production - "The Great Recession 2: Time To Pay The Reaper" (definitely worth 3 minutes of your time...)

  1. Bank of America is shady af. Recently fined $200m for botching pandemic unemployment distribution (read: they tried to pocket a huge amount of that)

  2. So tl;drs: In 2008 loans were given to individuals who could not pay them back; in 2022 loans have been given to corporations who cannot pay them back.

  3. I mean this is true, but Banks aren’t just giving loans to companies that shouldn’t get loans for the hell of it. It is moreso related to the RC tweet where he mentions weaning the economy off cheap money. Cash flow lenders have been giving money to companies at favorable rates because operating conditions have been favorable for a long time and rates have been low. So yes they have been tapping into increased levels of debt and at a certain point these interest rates are going to start crushing their ability to service that debt when operating performance deteriorates.

  4. So wouldn’t the higher interest rates and increased difficulty in refinancing with favorable conditions basically make the problem come to a head? Like now the only option for all that cheap equity is to start paying it back and the companies that weren’t profitable and can’t yet are screwed in a few months (in the middle of repayment)?

  5. There is something to this and definitely not the first time I’ve heard it. Some people will make a lot of money buying bonds in these way over leveraged companies when they crash.

  6. I own a small business. Get at least 1 call per day from some finance bros saying I’m “pre qualified for a $500,000 line of credit”. Potentially a scam, I’ve never answered. But have never got these calls until all this shit started unfolding. And by small business I mean small. $500k is way fuckin more than annual gross sales 😂. It’s so obvious at this point

  7. I wonder if they need to offload some property to cover a loan? Say a dormant movie rental company. Rhymes with Clock Duster......

  8. Have you heard of the butterfly-effect? A butterfly in Africa flaps it’s wings and that small puff of wind turns into a hurricane one-day in Louisiana. Doesn’t matter if its $1 or $1-billion dollars in bad loans generated just so you can get rich today with no care for tomorrow.

  9. This sub has talked about the issues with leveraged loans for a year now. I'm glad to see more sources considering it to be an issue..

  10. Hey, dumbasses are dumbasses because they won’t learn. Until they either get punished or die, they won’t change a thing, and Gary doesn’t really seem a punishment person

  11. i dont want to ruin the post, but i was looking for GME statement. uhm if the great recession happens what will happen to us apes who hodl? is this a different thing or somehow we are saved since we have the stonk? i just like the stonk

  12. Treat the company like any other company first and foremost. GameStop stock has an intrinsic value based on the company’s future earning potential.

  13. Where’s the 10q where this loan first pops up? Surely a loan like this would show on a quarterly financial report and would have been picked up by someone? Unless, this “entertainment company” is privately owned and doesn’t trade stock.

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